Eugene Weekly : 6.21.07

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February 24, 2012 - 2:13am

SplitsvilleDevelopers' bill divides and conquersBY ALAN PITTMAN

What three decades of planning joined together developers have split asunder. The Oregon Home Builders Association, backed by Springfield officials, rammed a bill through the state Legislature this spring to split the Eugene/Springfield urban growth boundary (UGB) in two and force Eugene to conduct an early buildable lands inventory, a move developers think will hasten UGB expansion in Eugene.

"This was a very important bill," said Eugene Mayor Kitty Piercy of the impact of HB 3337, which she expects the governor will soon sign. "We were very surprised and disappointed."

Developers working with Springfield bulldozed a pro-sprawl law through the Legislature with questionable arguments in a result that may impact livability, taxes and city relations for decades to come.

Local developers have been fighting for years to expand Eugene/Springfield's joint UGB to allow more urban sprawl. Developers tried legal action to force the city to update its buildable lands inventory, the first step toward a UGB expansion, but lost. They convinced Springfield to let developers pay $40,000 for a new land study for their side of the UGB, but Eugene refused to go along and held potential veto power over any big Springfield UGB expansion. In January the council voted 5-4, with Piercy breaking the tie, to follow a staff recommendation to not conduct a new land inventory.

Undaunted, the developers took the local fight to Salem. HB 3337, "at the request of Oregon Home Builders Association," the Legislature's official bill ledger read, was quickly scheduled for an April hearing. The bill would split the local UGB and force Eugene to do the land study in two years. Springfield Rep. Terry Beyer, Sen. Bill Morrisette, Mayor Sid Leiken and Springfield city councilors backed the bill. But the key engine behind the legislation was the Home Builders, one of the most powerful lobbying groups in the state.

"They're very, very powerful," said Eugene's lobbyist, Alex Cuyler, noting how the developer group killed legislation that may have required developers, instead of taxpayers, to fund their full growth impact on schools.

"The Home Builders have usurped the timber industry" in terms of their "monstrous power" in Salem, Eugene Councilor Bonny Bettman said. "They have lawmakers from both sides of the aisle in their pocket."

In the 2004 election cycle, the latest where comprehensive data was available, the Home Builders' political action committee was one of the state's biggest spenders with $170,000 in contributions. Republicans got 83 percent of the money, but the developer PAC gave Democratic Senate Majority Leader Kate Brown $9,000 and Democratic House Majority Leader Dave Hunt $500.

Cuyler said Home Builders lobbyist Jon Chandler described Springfield as "his non-client client" on the bill. "They were working very closely."

Developers and their Springfield allies made HB 3337 a top priority. Piercy said she heard there were threats to hold up a key energy bill and/or a key fix for Measure 37 if the sprawl bill wasn't passed. With the message out that important bills "might have a hard time getting through," Eugene "seemed not as important," Piercy said.

The Salem chaos caused by Measure 37's effective repealing of sprawl controls for many developers in Oregon may also have helped pass the local sprawl bill. "Measure 37 is just a complete attack on land use laws; this isn't that different," Cuyler said.

Home Builders lobbyists have argued in Salem that Measure 37 should be fixed by restricting development outside UGBs while allowing for easy UGB expansions and unrestricted development inside the growth boundaries.

Piercy said the city also failed to jump on the sprawl bill quickly. "Alex hadn't expected it to be taken as seriously," she said.

Cuyler admits that "he probably could have been better prepared" for one early hearing. But, he said, with so much power behind it, "there was no way that bill would have not come out of that committee."

At a later Senate hearing, Piercy offered to compromise by backing a lands study if the UGB split provision were dropped, but proponents didn't respond.

In May, the Oregon House voted 50-5 for HB 3337. On June 1, the Senate voted 25-2 for the sprawl measure. Rep. Chris Edwards, a west Eugene Democrat, and Sen. Vicki Walker, a north Eugene Democrat, voted for the developer bill. The four other legislators representing Eugene were opposed as were Lane County, Friends of Eugene, the League of Oregon Cities, 1000 Friends of Oregon, the city of Salem and the state Department of Land Conservation and Development.

Piercy said she plans to make a last-ditch plea for a veto. But Cuyler said he has heard from the governor's staff that Ted Kulongoski will sign the bill. Lee Beyer, a Kulongoski associate whom the governor appointed to chair the state Public Utility Commission, helped his wife, Rep. Terry Beyer, push the bill.

Arguments

Was the bill so convincing that it merited such a legislative landslide?

A key argument made by developers and their allies was that opening the UGB to sprawl would reduce housing costs.

"We're clearly driving young families out of the marketplace," said Springfield's Republican Mayor Sid Leiken at a hearing.

"My concern is for affordability for young families," said PUC Chair Lee Beyer.

Developers have long made the argument that regulation hurts affordable housing. The Home Builders' PAC is officially called not "Developers for Higher Profits" but "Oregonians for Affordable Housing."

That may be little more than spin. Numerous studies have shown that sprawl does not reduce housing costs but increases them. The state land-use watchdog 1000 Friends points to studies by a professor of economics at Lewis and Clark College and by the American Planning Association showing that UGBs don't increase housing prices. Los Angeles and Orange County have far higher housing prices than cities in Oregon despite their uncontrolled sprawl, 1000 Friends points out. Rising home prices are due less to rising land costs than to increased demand from booming population and developer choices to build more profitable, expensive homes, according to 1000 Friends and other planning advocates.

In addition, planning advocates point to studies demonstrating that inefficient sprawl increases city infrastructure costs, raising property taxes to pay for it and subsequently increasing housing costs. Sprawl victims also face the high cost (not only in gas but in wasted time) of long commutes, planning advocates say.

The affordable housing argument also raises the question that if Springfield officials and the Home Builders Association were so concerned about dwindling residential land, why didn't they oppose PeaceHealth's massive rezoning of residential land to commercial for its new hospital at RiverBend? In that recent decision, Springfield officials backed the hospital's argument that the residential land wasn't needed.

Bettman also wonders why the Home Builders earlier fought a regulation prohibiting big house lots if they really wanted affordable housing. "They want unlimited land to build low-density expensive housing," she said.

Proponents of the sprawl measure also argued that failure to expand the UGB was leading to more sprawl via "leap frog" development in outlying cities. But that's not supported by U.S. Census and state population estimate data.

From 1990 to 2006, Eugene has accounted for 63 percent of the population growth in Lane County, despite starting with only about 40 percent of the county population. Outlying cities have grown faster than Eugene, but they started out tiny and remain small. Since 1990 growth in Veneta has accounted for only 3 percent of the countywide population increase while Coburg accounts for only 1 percent of the growth.

Race to the Bottom

Another key argument by bill proponents was that Springfield should be free to compete with Eugene by luring away its residents and businesses.

The current joint UGB planning "does not address the reality of this [development] occurring by virtue of individuals selecting between one of two cities within the UGB," Leiken testified. A unified UGB "may indeed absorb future growth, but denies the inevitability that people may choose to live in one city rather than the other."

Rep. Terry Beyer joked with a legislator that Springfield wants to annex Eugene, and said, "We are certainly doing it one homeowner and one business at a time."

If Springfield is trying to compete with Eugene for businesses and residents, it has a long way to go. Since 1990, Eugene's population growth rate has outpaced Springfield's. Eugene also remains the region's job supplier. According to Census data, almost two-thirds of workers in Springfield work outside of Springfield, most likely in Eugene.

From crime to income to education, Springfield, with its roots as a mill town, trails Eugene, a college town, in a host of common measures of desirability (see sidebar). While Eugene routinely makes national best places lists, Springfield is struggling to win a contest as the city most like the dysfunctional Springfield in The Simpsons animated TV series. Recently, The Register-Guard reported that residents of a huge new upscale development in Springfield told people they lived in "MountainGate" to avoid the stigma of the "S-town."

But while Springfield officials and their developer friends appear eager to egg Eugene into a race to the regulatory bottom, Eugene officials are trying to ignore it.

"Engaging in that level of destructive public discourse is not progressive; it doesn't get you anywhere," said Eugene Councilor Bettman. "We have a city to run."

"I certainly don't feel it from our side," Piercy said of the supposed competition with Springfield. Asked if developers were trying to play the two cities off each other, Piercy responded, "Whereas I see cooperation as being good for the success of this region, others may see fueling the flames of supposed dispute as serving their purposes."

Leiken also argued that the bill was about municipal freedom. "Local elected officials are in the best position to determine the most appropriate course of action for their cities," he testified.

But that freedom came at Eugene's expense. "They got the entire state Legislature to impose their will on a neighboring jurisdiction," Bettman said. "It is very bad public policy."

HB 3337 may be bad policy, but it's big profits for developers. Studies have shown that cheap farm and forest land bought outside the UGB by land speculators can multiply in value by a factor as high as 10 when the UGB expands.

Though developers may cash in, citizens may be left holding the bill.

More sprawl may mean higher taxes or cuts in services in Springfield to pay for it.

Eugene taxpayers will also have to foot the bill for the expensive land inventory required by the bill. City officials say the residential lands mandate will also effectively require the city to complete related commercial and industrial lands inventories at a total cost of about $200,000.

Bettman said the cost could get even higher, "probably more than a million dollars," as the city tries to fix all of its interrelated planning documents that assume a joint UGB.

"It could be very complicated," Piercy said. The Eugene City Council is waiting for a memo from the city attorney spelling out exactly what the bill may require of the city.

State law forbids "unfunded mandates" on municipalities, but the high vote margin in the Legislature effectively waived the prohibition.

If Eugene's study does force a UGB expansion, Eugene taxpayers could also pay more for sprawl. A city committee last week proposed to help defer that cost with a tax on windfall developer profits from UGB expansions. Piercy said the proposal "would be worth looking at."

A less tangible cost of the measure may be regional cooperation. Piercy said in the past she's gone out of her way to help Springfield. For example, she said she lobbied for Springfield priorities in Washington, D.C., when their officials couldn't make the trip.

But Springfield's recent surprise actions in Salem against Eugene "does put us in an awkward position," Piercy said. "It's going to cause us to be very cautious and careful."